Slide 1: 3rd Quarter FY 2019 Earnings Presentation
3rd Quarter FY 2019 Earnings Presentation February 7, 2019
Slide 2: Non-GAAP financial measures
Non-GAAP financial measures We present non-GAAP financial measures of performance which are derived from the unaudited condensed consolidated statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), EBIT margin, adjusted EBIT, adjusted E
Slide 3: Forward-looking statements
Forward-looking statements All statements in this presentation that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statem
Slide 4: 3rd Quarter FY 2019 - Mike Lawrie
3rd Quarter FY 2019 Earnings Presentation Mike Lawrie Chairman, President and Chief Executive Officer
Slide 5: Key messages
Key messages Revenue of $5.18B — up $165M sequentially Strong double-digit YoY growth in Digital revenue with a book-to-bill of 2.1x Q3 non-GAAP EPS(1) of $2.23 Adjusted EBIT margin of 16.2% — up 160 basis points YoY Continuing to invest in Digital assets and capabilities, including the planned acqu
Slide 6: 3rd Quarter FY 2019 - Paul Saleh
3rd Quarter FY 2019 Earnings Presentation Paul Saleh Executive Vice President and Chief Financial Officer
Slide 7: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results Q3 FY19 Transaction, Amortization of Restructuring Separation and Tax Non-GAAP (in millions except EPS) GAAP Acquired Intangible Costs Integration-Related Adjustment Results Assets Costs Income from continuing operations before income taxes 469 76 107 134 - 786 Inc
Slide 8: 3rd quarter results
3rd quarter results Q3 YTD FY19 FY18 FY19 FY18 Revenue ($M) $ 5,178 $ 5,460 $ 15,473 $ 16,149 – YoY Growth – GAAP (5.2%) (4.2%) – YoY Growth – cc (2.6%) (3.6%) – QtQ Growth – GAAP 3.3% — – QtQ Growth – cc 4.3% — Adjusted EBIT ($M) 840 797 2,442 2,107 Adjusted EBIT Margin (%) 16.2% 14.6% 15.8% 13.0%
Slide 9: Global Business Services (GBS)
Global Business Services (GBS) Q3 FY19 Q3 FY18 YTD FY19 YTD FY18 Revenue ($M) $ 2,169 $ 2,315 $ 6,493 $ 6,893 – YoY Growth – GAAP (6.3%) (5.8%) – YoY Growth – cc (4.0%) (5.2%) – QtQ growth – GAAP 2.7% — – QtQ growth – cc 3.7% — GBS Profit ($M) 395 423 1,198 1,066 GBS Profit Margin (%) 18.2% 18.3% 18
Slide 10: Global Infrastructure Services (GIS)
Global Infrastructure Services (GIS) Q3 FY19 Q3 FY18 YTD FY19 YTD FY18 Revenue ($M) $ 3,009 $ 3,145 $ 8,980 $ 9,256 – YoY Growth – GAAP (4.3%) (3.0%) – YoY Growth – cc (1.5%) (2.4%) – QtQ growth – GAAP 3.7% — – QtQ growth – cc 4.8% — GIS Profit ($M) 528 450 1,475 1,171 GIS Profit Margin (%) 17.5% 14
Slide 11: Financial highlights
Financial highlights Q3 FY19 YTD FY19 Cash Flow ► Adjusted Free Cash Flow $503M $1,188M(1) Performance ► Cap Ex — Including Payments on Capital Leases $153M $829M ► Cap Ex as a % of Revenue 3.0% 5.4% Q3 FY19 YTD FY19 Capital to Capital to ► Cash Dividends $54M $159M Shareholders Shareholders $797M $
Slide 12: FY 2019 targets
FY 2019 targets Revenue $20.7B – $21.2B Non-GAAP EPS(1) $8.15 – $8.30 Adjusted Free Cash Flow 70% – 80% of Adj. Net Income(1) 1 Excludes restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and tax adjustment 3rd Quarter FY 2019 Earn
Slide 13: Bookings
Bookings(1) FY18 FY19 $B $5.7 $5.5 $4.9 $4.6 $4.7 $2.3 $3.3 $2.0 $2.0 $2.2 $3.4 $2.9 $2.6 $2.2 $2.5 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 GBS Global Business Services GIS Global Infrastructure Services 1 The summation of the quarter bookings number may not equal the full-year number, due to roundi
Slide 14: Supplemental Information
3rd Quarter FY 2019 Earnings Presentation Supplemental Information
Slide 15: Non-GAAP reconciliations
Non-GAAP reconciliations EBIT and Adjusted EBIT (in millions) Q3 FY19 Q3 FY18 YTD FY19 YTD FY18 Net income $ 466 $ 779 $ 991 $ 1,217 Income from discontinued operations, net of taxes - (73) (35) (198) Income tax expense (benefit) 3 (365) 205 (303) Interest income (27) (27) (92) (59) Interest expense
Slide 16: Non-GAAP reconciliations
Non-GAAP reconciliations Segment profit (in millions) Q3 FY19 Q3 FY18 YTD FY19 YTD FY18 GBS profit $ 395 $ 423 $ 1,198 $ 1,066 GIS profit 528 450 1,475 1,171 All other profit (loss) (83) (76) (231) (130) Interest income 27 27 92 59 Interest expense (81) (73) (249) (220) Restructuring costs (76) (210
Slide 17: Q3 FY19 non-GAAP results
Q3 FY19 non-GAAP results Transaction, Amortization of Restructuring Separation and Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- Adjustment Results Intangible Assets Related Costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 3,725 $ - $
Slide 18: YTD FY19 non-GAAP results
YTD FY19 non-GAAP results Transaction, Amortization of Restructuring Separation and Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- Adjustment Results Intangible Assets Related Costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 11,110 $ -
Slide 19: Q3 FY18 non-GAAP results
Q3 FY18 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Adjustment Results Intangible Assets Related Costs Gains Cost of services (excludes depreciation and amo
Slide 20: YTD FY18 non-GAAP results
YTD FY18 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Adjustment Results Intangible Assets Related Costs Gains Cost of services (excludes depreciation and am
Slide 21: Adjusted free cash flow
Adjusted free cash flow (in millions) Q3 FY19 YTD FY19 Net cash provided by operating activities $ 186 $ 1,035 Net cash provided by (used in) investing activities 8 (40) Acquisitions, net of cash acquired 289 332 Business dispositions - 65 Payments on capital leases and other long-term asset financi
Slide 22: Non-GAAP and other definitions
Non-GAAP and other definitions Segment profit: Segment revenue less costs of services, segment selling, general and administrative, depreciation and amortization, and other income, excluding the movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities an
Slide 23: DXC.technology
v DXC.technology D,